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Tank fleet revenues sag during one of worst recessions

TANK fleets struggled during 2009 to minimize the financial damage from one of the worst recessions in US history. In fact, this was the first time since Bulk Transporter began tracking tank truck carrier gross revenues that the industry may have actually shrunk year-over-year.

However, the revenue drop might not have been as severe as it appears in this year's Bulk TransporterAnnual Gross Revenue Report. A significant number of tank truck carriers include fuel surcharge payments in their gross revenues. Those surcharges soared during 2008 before falling to nearly zero during 2009. This exaggerated the overall revenue reduction that many carriers reported for this year's analysis. Carriers that do not add surcharges to gross revenues showed a much smaller drop in those revenues.

That said, 2009 was still a tough year for the US tank truck industry, and trucking as a whole. The American Trucking Associations' For-Hire Truck Tonnage Index for 2009 dropped by 8.7%, which was the largest annual decrease since a 12.3% plummet in 1982.

Rates fell as tank truck carriers reported that shipment volumes were down by as much as 40% in some bulk sectors at the height of the recession. Carriers parked equipment and laid off drivers, which added to an overall real unemployment rate that approached 19%.

Three quarters of the carriers participating in this year's Bulk TransporterAnnual Gross Revenue Report posted revenues that declined from 2008 to 2009. In contrast, nearly 67% of respondents showed revenue improvement in the previous Annual Gross Revenue Report. Operating ratios also deteriorated for nearly half of the carriers in this year's report.

The Top 10 tank truck carriers were no better than the rest of the industry. All 10 posted lower revenues in 2009. Operating ratios also deteriorated for most of them.

Despite the economy, Kenan Advantage Group Inc was able to leapfrog Quality Distribution Inc into the top spot. The order also shifted for some of the other carriers rounding out the Top 10: Trimac Transportation Inc, Ruan Transport Corp, Superior Bulk Logistics Inc, A&R Transports Inc, Groendyke Transport Inc, Foodliner/Quest Liner Inc, Schneider National Bulk Carriers, and Enterprise Transportation Co.

Combined Top 10 revenues were $2.98 billion in 2009, down from $3.7 billion in 2008. Top 10 revenues in 2009 accounted for 56.1% of the total in the report.

The Top 25 carriers achieved $4.34 billion in revenues, or nearly 82% of the total represented in this report. While that is a decrease compared with $5.2 billion in revenues for the Top 25 in 2008, it shows continued marketshare growth for the larger carriers.

Total 2009 revenues for all 62 carriers in this report were $5,319,428,672. In contrast, those same carriers accounted for a 2008 combined total of $6,353,355,395.

Average revenue in 2009 was $85,797,236, down $12.3 million from the average of $98,099,637 in 2008. The average grew by $7.3 million from 2007 to 2008.

The median carrier on the list, the one with an equal number of carriers above and below it, had revenues of $44,800,000. In 2008, the median carrier revenue was $54,000,000.

Operating ratios for both 2009 and 2008 were supplied by 43 of the carriers in this report. Just 12 (less than 28%) showed improvement over the previous year. The operating ratio represents operating expenses as a percentage of revenue.

For 2009, thirty-two fleets had operating ratios between 95.0% and 99.9%, and four posted ratios above 100%. In 2008, thirty-four carriers had operating ratios in the 95.0% to 99.9% range, and only one topped 100%. Just 10 carriers, compared with 18 from the previous year, reported operating ratios below 94.9%.

Most of the fleets participating in the 2009 report submitted data used to calculate tractor revenues. These numbers give an indication of productivity levels, and this was one area of improvement in 2009 for tank truck carriers. The average for 2009 was $241,797, a solid improvement over the $219,092 average in 2008.

Nine of the Top 10 reported tractor revenues, averaging $267,074. This was a healthy increase over the $227,793 average reported by the Top 10 in 2008.

Petroleum haulers once again showed that they have some of the most productive fleets in the tank truck industry. The best productivity (tractor revenue of $456,600) came from a Northeast petroleum carrier. The lowest tractor revenue ($122,392) was reported by a dry bulk hauler.

Average revenue per tractor for a representative sample of 10 petroleum haulers was $287,776, up from the previous year's average of $247,852. The lowest tractor revenue reported by a petroleum fleet was $141,737.

Ten chemical haulers accounted for average revenue per tractor of $241,593, up from $199,299 in 2008. Chemical tractor revenue ranged from a high of $443,828 down to $$166,077.

Average tractor revenue for five dry bulk specialists was $212,230, a strong increase from a $197,677 average in 2008. The high for the category was $273,684.

Among five carriers that focus on transporting bulk liquid and dry foods, tractor revenue averaged $231,901, up from the 2008 average of $151,403. Food fleet tractor revenue ranged from a high of $296,698 to a low of $177,579.

Many of the figures used here are from preaudited reports, and may include nonbulk revenues or revenues from subsidiary tank truck carriers. In all cases, the numbers were supplied directly to Bulk Transporter. The staff greatly appreciates the cooperation of all who helped in the preparation of this report.